Economic Encounters of the Plural Kind

Nobel Prize in Economics

The Nobel prize committee announced this morning that Elinor Ostrom and Olliver E. Williamson, two Americans, will share this year’s Nobel Memorial Prize in Economics. (The New York Times and The Washington Post report on it here and here, respectively). Now, I’m not an economist, so I won’t try to analyze (or explain) the work itself. But we all know that the Nobel prize is very political, so I’d like to consider what message is being sent by this prize, or more accurately, what message Notre Dame should take form it.

The Times best summarizes the most important aspects of this year’s recipients, writing of Professor Ostrom (Indiana University),

Her background is in political science, not economics.

Wait, a non-economist just won the economics prize? This should give us (and Notre Dame) pause to think about whether or not economics really is the isolated field the mainstream department likes to think it is.

To be fair, the administration is only seeking a higher ranking by pursuing a department that looks like its ivy counterparts. To quote Sean Mallin from the recent Scholastic article (which Matt writes about here),

Notre Dame strives to be like its ‘peer institutions': Harvard, MIT and Yale, all mainstream. They are caught up in a game of follow the leader.

So how are mainstream economists at top programs reacting to today’s announcement? Again, the Times helps us out:

“It is part of the merging of the social sciences,” Robert Shiller, an economist at Yale, said of Monday’s awards. “Economics has been too isolated and these awards today are a sign of the greater enlightenment going around. We were too stuck on efficient markets and it was derailing our thinking.”

Yikes! That’s quite an admission. The writing might not be on the wall yet, but the signs are becoming clearer and clearer that the economics world may be thawing to some heterodox ideas. I’ve always been under the impression that Nobel prizes are pretty prestigious- the type of thing you would want your faculty to bring to your institution. So maybe the economics program at Notre Dame should look to hire more professors like Elinor Ostrom instead of closing their department. (Ostrom is the Founding Director of the Center for the Study of Institutions, Population, and Environmental Change at Indiana University. Sounds like ECOP to me. Read more of here accomplishments at this IU bio-like page).

Notre Dame has a chance right not to lead its ‘peer’ institutions in the study of economics. Instead, it’s setting itself up for what may soon be a very backward-looking department.

Open Economics

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